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Record fine for Williams in benzene leak case

State regulators Thursday unanimously signed off on a record $423,300 fine against Williams for benzene contamination of a spring that led to a man becoming ill in 2008.

The Colorado Oil and Gas Conservation Commission acted in a case that came to light when Ned Prather drank the spring water at his cabin northwest of Parachute in May 2008 and had to go to the hospital.

The commission approved a settlement previously agreed to between the agency’s staff and Williams. But some commissioners suggested companies are being let off too lightly in terms of financial penalties in such settlements.

“It seems very generous” to Williams, commissioner Michael Dowling said of the negotiated amount.

He said he fears such amounts aren’t high enough to serve as a deterrent.

Williams continues to disagree with the state’s determination that the contamination came from a nearby Williams production pit that had a leaking liner. Alan Harrison, a vice president who oversees Williams’ drilling in the Piceance Basin, told the commission the company agreed to the settlement in lieu of investing more money and manpower into the investigation regarding the contamination.

“We’re going to continue our goal of producing natural gas in the Piceance Basin in a very safe and responsible manner. We’re committed to that,” Harrison said.

The previous record fine by the commission was $390,000, imposed in April against Oxy USA for another case of spring contamination, also northwest of Parachute.

The same day, the commission levied another fine of $257,400 against Oxy for yet another case of spring contamination in the same area.

The state is investigating Oxy as the possible source of contamination of a second spring on the Prather property, although the Prather family has sued another company, Nonsuch, contending it’s to blame in that case. The Prathers also have sued Williams in connection with the first case.

Three of the four highest fines ever levied by the commission involve Garfield County violations. In 2004, EnCana Oil & Gas (USA) was fined what was then a record $371,200 for a gas seep into West Divide Creek south of Silt.

Oil and gas Commissioner Tresi Houpt, also a Garfield County commissioner, said she questions the commission’s practice of agreeing to reduced fine amounts in return for companies helping in investigating and remediating contamination cases. A company at fault should be expected to do no less, she said.

But some commissioners focused Thursday not on the penalty amount but the need to prevent more such incidents.

“I’m less concerned with the fines than with what’s going to happen in the future,” commission Chairman Joshua Epel said.

Money spent investigating problems would be better spent on preventing them, he said.